American Woodmark Corporation Announces Third Quarter Results
MWN-AI** Summary
American Woodmark Corporation (NASDAQ: AMWD) recently announced its third quarter results for fiscal 2026, revealing significant challenges amid a decline in net sales and an unexpected net loss. For the quarter ending January 31, 2026, the company reported net sales of $324.3 million, a drop of 18.4% from the previous year. This downturn was compounded by a net loss of $28.7 million, equivalent to $(1.97) per diluted share, which reflects a stark contrast to the prior year's net income of $16.6 million.
The notable net loss included a non-cash goodwill impairment charge of $30.1 million, highlighting the impact of lower sales and rising costs associated with tariffs and inputs. Despite these challenges, the company's adjusted EPS was $0.45, and adjusted EBITDA fell 43.9% to $21.6 million, or 6.7% of net sales.
Management, led by President and CEO Scott Culbreth, acknowledged the continued struggles within the new construction and remodel markets and indicated that addressing the tariff impacts and demand fluctuations were top priorities. The company has initiated several cost-cutting measures, including supplier negotiations and restructuring efforts, to mitigate the effects of these challenges.
Year-to-date performance was also troubling, with net sales down 14.3% to $1.12 billion and a year-to-date net loss of $8 million. Notably, the company has a pending merger with MasterBrand, Inc., aimed at improving product offerings and expanding market reach. However, no conference call was held to discuss these results due to the ongoing merger discussions. As of January 31, 2026, American Woodmark maintains $28.3 million in cash and a total debt of $369.1 million, with a net leverage ratio of 2.26.
MWN-AI** Analysis
American Woodmark Corporation (NASDAQ: AMWD) reported disappointing third-quarter results for fiscal 2026, characterized by significant declines in both net sales and earnings. With net sales of $324.3 million, a decline of 18.4% year-over-year, and a net loss of $(28.7) million (including a non-cash goodwill impairment charge of $30.1 million), the company’s performance underscores ongoing challenges in the new construction and remodeling dynamics exacerbated by increasing tariffs and input costs.
Despite the challenges, the adjusted EPS of $0.45 offers a glimmer of hope, suggesting that, excluding impairments and other significant charges, the core operations are somewhat resilient. However, the steep fall from $1.05 in the previous year raises concerns regarding market stability and the ability to regain lost ground. The adjusted EBITDA margin of 6.7% signifies operational strain, as fixed costs have become less absorbable due to decreased volumes.
Moving forward, investors should monitor the pending merger with MasterBrand, Inc., which could provide American Woodmark with expanded product offerings and market reach—potentially boosting its competitive edge. However, the impending increase in Section 232 tariffs, expected to rise to 50% by January 2027, could severely impact margins, making cost measures crucial.
Given these developments, a cautious approach is advisable. Current shareholders may consider holding their positions until the integration with MasterBrand and its effects on operations become clearer. New investors might adopt a wait-and-see strategy, evaluating how effectively the company can navigate its operational challenges and capitalize on merger synergies. In summary, while potential exists within American Woodmark, significant headwinds suggest a careful assessment of risk versus reward.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Fiscal Third Quarter 2026 Financial Highlights:
- Net sales of $324.3 million
- Net loss of $(28.7) million; (8.9)% of net sales, including a non-cash goodwill impairment charge of $30.1 million
- GAAP EPS of $(1.97); adjusted EPS of $0.45
- Adjusted EBITDA of $21.6 million; 6.7% of net sales
Fiscal 2026 Year to Date Financial Highlights:
- Net sales of $1,122.0 million
- Net loss of $(8.0) million; (0.7)% of net sales, including a non-cash goodwill impairment charge of $30.1 million
- GAAP EPS of $(0.55); adjusted EPS of $2.21
- Adjusted EBITDA of $103.5 million; 9.2% of net sales
- Cash provided by operating activities of $31.1 million; free cash flow of $2.1 million
American Woodmark Corporation (NASDAQ: AMWD) (“American Woodmark,” “the Company,” “we,” “our,” or “us”) today announced results for its third fiscal quarter ended January 31, 2026.
“Demand trends were once again challenging in both the new construction and remodel markets with new construction softening throughout the quarter. We delivered Adjusted EBITDA margins of 6.7% for the third fiscal quarter, as lower volumes impacted fixed cost absorption,” said Scott Culbreth, President and CEO. “Mitigating tariffs and reducing the impact of lower demand on the business remain our top priorities. Actions include structural cost reductions, supplier negotiations, alternative sourcing, and price increases. The estimated unmitigated tariff impact, in effect as of the end of the third quarter of fiscal 2026, represents approximately 3.5-4.0% of the Company’s annualized net sales with the impact varying by product category. This impact does not include the potential increase on Section 232 tariffs to 50% on January 1, 2027, or any changes due to the Supreme Court decision on February 20, 2026. The Company is also focused on closing the previously announced merger transaction with MasterBrand, Inc., which will enable us to provide a broader product portfolio across expanded channels, advance our innovation capabilities, and create exciting opportunities for team members.”
Third Quarter Results
Net sales for the third quarter of fiscal 2026 decreased $73.3 million, or 18.4%, to $324.3 million compared with the same quarter last fiscal year. Net loss was $(28.7) million ($(1.97) per diluted share and (8.9)% of net sales) compared with net income of $16.6 million ($1.09 per diluted share and 4.2% of net sales) for the same quarter last fiscal year. This decrease of $45.3 million included a non-cash goodwill impairment charge of $30.1 million. This decrease was also due to the following: lower net sales, volume deleverage in our manufacturing locations, higher tariff and input costs, merger-related expenses, and restructuring charges, net. This decrease was partially offset by lower volume-based costs at our operating locations, lower incentive compensation, and controlled discretionary spending across all locations and functions. Adjusted EPS per diluted share was $0.45 for the third quarter of fiscal 2026 compared with $1.05 for the same quarter last fiscal year. Adjusted EBITDA for the third quarter of fiscal 2026 decreased $16.9 million, or 43.9%, to $21.6 million, or 6.7% of net sales, compared with $38.4 million, or 9.7% of net sales, for the same quarter last fiscal year.
Fiscal Year to Date Results
Net sales for the first nine months of fiscal 2026 decreased $187.2 million, or 14.3%, to $1,122.0 million compared with the same period last fiscal year. Net loss was $(8.0) million ($(0.55) per diluted share and (0.7)% of net sales) compared with net income of $73.9 million ($4.79 per diluted share and 5.6% of net sales) for the same period last fiscal year. This decrease of $81.9 million included a non-cash goodwill impairment charge of $30.1 million. This decrease was also due to the following: lower net sales combined with an unfavorable mix shift towards value-based offerings, volume deleverage in our manufacturing locations, higher tariff and product input costs, increased Digital Transformation spending related to our ERP deployment strategy, merger-related expenses, non-cash goodwill impairment, higher interest expense, and restructuring charges, net. This decrease was partially offset by lower volume-based costs at our operating locations, lower incentive compensation, favorable mark-to-market adjustments on our foreign exchange forward contracts, and controlled discretionary spending across all locations and functions. Adjusted EPS per diluted share was $2.21 for the first nine months of fiscal 2026 compared with $5.28 for the same period last fiscal year. Adjusted EBITDA for the first nine months of fiscal 2026 decreased $58.1 million, or 35.9%, to $103.5 million, or 9.2% of net sales, compared with $161.5 million, or 12.3% of net sales, for the same period last fiscal year.
In light of our pending merger with MasterBrand, Inc., previously announced on August 6, 2025, we will not be holding a conference call to discuss our third quarter of fiscal 2026 results and we will not be providing or updating previously issued financial guidance.
Balance Sheet & Cash Flow
As of January 31, 2026, the Company had $28.3 million in cash plus access to $315.7 million of additional availability under its revolving credit facility. Also, as of January 31, 2026, the Company had total debt of $369.1 million, including $193.8 million in term loan debt and $173.4 million drawn on its revolving credit facility and net leverage was 2.26.
Cash provided by operating activities for the first nine months of fiscal 2026 was $31.1 million and free cash flow totaled $2.1 million. The Company repurchased 209,757 shares, or approximately 1.4% of shares outstanding, for $12.4 million during the first nine months of fiscal 2026. No shares were repurchased by the Company in the third quarter of fiscal 2026.
About American Woodmark
American Woodmark celebrates the creativity in all of us. With over 7,800 employees and more than a dozen brands, we’re one of the nation’s largest cabinet manufacturers. From inspiration to installation, we help people find their unique style and turn their home into a space for self-expression. By partnering with major home centers, builders, and independent dealers and distributors, we spark the imagination of homeowners and designers and bring their vision to life. Across our service and distribution centers, our corporate office, and manufacturing facilities, you’ll always find the same commitment to customer satisfaction, integrity, teamwork, and excellence. Visit americanwoodmark.com to learn more and start building something distinctly your own.
Use of Non-GAAP Financial Measures
We have presented certain financial measures in this press release which have not been prepared in accordance with U.S. generally accepted accounting principles (GAAP). Definitions of our non-GAAP financial measures and a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP are provided below following the financial highlights under the heading "Non-GAAP Financial Measures."
Safe harbor statement under the Private Securities Litigation Reform Act of 1995: All forward-looking statements made by the Company involve material risks and uncertainties and are subject to change based on factors that may be beyond the Company's control. Accordingly, actual outcomes and results may differ materially from those expressed or implied in any such forward looking statements. Such factors include, but are not limited to, those described in the Company's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
AMERICAN WOODMARK CORPORATION | |||||||||||||||
Unaudited Financial Highlights | |||||||||||||||
(in thousands, except share data) | |||||||||||||||
Operating Results | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
January 31, | January 31, | ||||||||||||||
2026 | 2025 | 2026 | 2025 | ||||||||||||
Net sales | $ | 324,300 | $ | 397,580 | $ | 1,121,983 | $ | 1,309,190 | |||||||
Cost of sales & distribution | 286,548 | 337,816 | 956,838 | 1,070,849 | |||||||||||
Gross profit | 37,752 | 59,764 | 165,145 | 238,341 | |||||||||||
Sales & marketing expense | 19,241 | 19,537 | 64,532 | 65,612 | |||||||||||
General & administrative expense | 19,075 | 18,632 | 66,356 | 60,371 | |||||||||||
Restructuring charges, net | 3,168 | 520 | 5,448 | 1,653 | |||||||||||
Goodwill impairment | 30,129 | — | 30,129 | — | |||||||||||
Operating (loss) income | (33,861 | ) | 21,075 | (1,320 | ) | 110,705 | |||||||||
Interest expense, net | 3,677 | 2,816 | 12,344 | 7,554 | |||||||||||
Other (income) expense, net | (1,029 | ) | (1,457 | ) | (5,727 | ) | 8,485 | ||||||||
Income tax (benefit) expense | (7,794 | ) | 3,145 | 86 | 20,776 | ||||||||||
Net (loss) income | $ | (28,715 | ) | $ | 16,571 | $ | (8,023 | ) | $ | 73,890 | |||||
Earnings Per Share: | |||||||||||||||
Weighted average shares outstanding - diluted | 14,569,239 | 15,159,442 | 14,548,800 | 15,430,164 | |||||||||||
Net (loss) income per diluted share | $ | (1.97 | ) | $ | 1.09 | $ | (0.55 | ) | $ | 4.79 |
Condensed Consolidated Balance Sheet | ||||||
(Unaudited) | ||||||
January 31, | April 30, | |||||
2026 | 2025 | |||||
Cash & cash equivalents | $ | 28,261 | $ | 48,195 | ||
Customer receivables, net | 92,084 | 111,171 | ||||
Inventories | 188,715 | 178,111 | ||||
Income taxes receivable | 14,013 | 2,567 | ||||
Prepaid expenses and other | 38,795 | 24,409 | ||||
Total current assets | 361,868 | 364,453 | ||||
Property, plant and equipment, net | 230,491 | 244,989 | ||||
Operating lease right-of-use assets | 107,777 | 128,907 | ||||
Goodwill, net | 737,483 | 767,612 | ||||
Other long-term assets, net | 67,471 | 64,608 | ||||
Total assets | $ | 1,505,090 | $ | 1,570,569 | ||
Current maturities of long-term debt | $ | 8,635 | $ | 7,659 | ||
Short-term lease liability - operating | 32,108 | 33,598 | ||||
Accounts payable & accrued expenses | 111,904 | 141,685 | ||||
Total current liabilities | 152,647 | 182,942 | ||||
Long-term debt, less current maturities | 360,512 | 365,825 | ||||
Deferred income taxes | 5,029 | — | ||||
Long-term lease liability - operating | 82,480 | 102,846 | ||||
Other long-term liabilities | 2,522 | 2,958 | ||||
Total liabilities | 603,190 | 654,571 | ||||
Stockholders' equity | 901,900 | 915,998 | ||||
Total liabilities & stockholders' equity | $ | 1,505,090 | $ | 1,570,569 |
Condensed Consolidated Statements of Cash Flows | ||||||||
(Unaudited) | ||||||||
Nine Months Ended | ||||||||
January 31, | ||||||||
2026 | 2025 | |||||||
Net cash provided by operating activities | $ | 31,123 | $ | 63,687 | ||||
Net cash used by investing activities | (28,969 | ) | (32,192 | ) | ||||
Net cash used by financing activities | (22,088 | ) | (75,409 | ) | ||||
Net decrease in cash and cash equivalents | (19,934 | ) | (43,914 | ) | ||||
Cash and cash equivalents, beginning of period | 48,195 | 87,398 | ||||||
Cash and cash equivalents, end of period | $ | 28,261 | $ | 43,484 |
Non-GAAP Financial Measures
We have reported our financial results in accordance with GAAP, and have discussed our financial results using the non-GAAP measures described below.
Management believes all of these non-GAAP financial measures provide an additional means of analyzing the current period's results against the corresponding prior period's results. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company's reported results prepared in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin
We use EBITDA, Adjusted EBITDA and Adjusted EBITDA margin in evaluating the performance of our business, and we use each in the preparation of our annual operating budgets and as indicators of business performance and profitability. We believe EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin allow us to readily view operating trends, perform analytical comparisons and identify strategies to improve operating performance. Additionally, Adjusted EBITDA is a key measurement used in our Term Loans to determine interest rates and financial covenant compliance.
We define EBITDA as net (loss) income adjusted to exclude (1) income tax expense, (2) interest expense, net, and (3) depreciation and amortization expense. We define Adjusted EBITDA as EBITDA adjusted to exclude (1) expenses related to the pending merger with MasterBrand, Inc., (2) restructuring charges, net, (3) goodwill impairment, (4) net gain/loss on debt modification, (5) stock-based compensation expense, (6) gain/loss on asset disposals, and (7) change in fair value of foreign exchange forward contracts. We believe Adjusted EBITDA, when presented in conjunction with comparable GAAP measures, is useful for investors because management uses Adjusted EBITDA in evaluating the performance of our business.
We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net sales.
Adjusted EPS per diluted share
We use Adjusted EPS per diluted share in evaluating the performance of our business and profitability. Management believes that this measure provides useful information to investors by offering additional ways of viewing the Company's results by providing an indication of performance and profitability excluding the impact of unusual and/or non-cash items. We define Adjusted EPS per diluted share as diluted earnings per share excluding the per share impact of (1) expenses related to the currently proposed Merger with MasterBrand, (2) restructuring charges, net, (3) goodwill impairment, (4) net gain/loss on debt modification, (5) change in fair value of foreign exchange forward contracts, and (6) the associated tax benefits.
Free cash flow
We use free cash flow to better understand cash flow trends in our business. We believe this measure gives investors an additional perspective on cash flow from operating activities in excess of amounts required for reinvestment. It also provides a measure of our ability to repay our debt obligations. We define free cash flow as net cash provided by operating activities less capital expenditures consisting of (1) cash payments to acquire property, plant and equipment and (2) cash investments in promotional displays.
Net leverage
Net leverage is a performance measure that we believe provides investors a more complete understanding of our leverage position and borrowing capacity after factoring in cash and cash equivalents that eventually could be used to repay outstanding debt.
We define net leverage as net debt (total debt less cash and cash equivalents) divided by the trailing-twelve months Adjusted EBITDA.
A reconciliation of these non-GAAP financial measures and the most directly comparable measures calculated and presented in accordance with GAAP are set forth on the following tables:
Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA margin | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
January 31, | January 31, | |||||||||||||||
(in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
Net (loss) income (GAAP) | $ | (28,715 | ) | $ | 16,571 | $ | (8,023 | ) | $ | 73,890 | ||||||
Add back: | ||||||||||||||||
Income tax (benefit) expense | (7,794 | ) | 3,145 | 86 | 20,776 | |||||||||||
Interest expense, net | 3,677 | 2,816 | 12,344 | 7,554 | ||||||||||||
Depreciation and amortization expense | 16,055 | 14,583 | 48,247 | 40,851 | ||||||||||||
EBITDA (Non-GAAP) | $ | (16,777 | ) | $ | 37,115 | $ | 52,654 | $ | 143,071 | |||||||
Add back: | ||||||||||||||||
Merger related expenses (1) | 4,156 | — | 13,441 | — | ||||||||||||
Restructuring charges, net (2) | 3,168 | 520 | 5,448 | 1,653 | ||||||||||||
Goodwill impairment | 30,129 | — | 30,129 | — | ||||||||||||
Net loss on debt modification | — | — | — | 364 | ||||||||||||
Change in fair value of foreign exchange forward contracts (3) | (1,010 | ) | (1,418 | ) | (5,624 | ) | 8,266 | |||||||||
Stock-based compensation expense | 1,713 | 2,141 | 6,600 | 7,946 | ||||||||||||
Net loss on disposal of property, plant and equipment | 207 | 87 | 816 | 229 | ||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 21,586 | $ | 38,445 | $ | 103,464 | $ | 161,529 | ||||||||
Net Sales | $ | 324,300 | $ | 397,580 | $ | 1,121,983 | $ | 1,309,190 | ||||||||
Net income margin (GAAP) | (8.9 | )% | 4.2 | % | (0.7 | )% | 5.6 | % | ||||||||
Adjusted EBITDA margin (Non-GAAP) | 6.7 | % | 9.7 | % | 9.2 | % | 12.3 | % | ||||||||
(1) Merger-related expenses are comprised of expenses related to the pending Merger with MasterBrand, Inc. | ||||||||||||||||
(2) Restructuring charges, net are comprised of expenses incurred related to the reductions-in-force implemented in the first nine months of fiscal 2026 in the U.S. and Mexico, the closure of the distribution facility located in Dallas, Texas, which was announced in August 2025, and the closure of the manufacturing facility located in Orange, Virginia, which was announced in January 2025. | ||||||||||||||||
(3) In the normal course of business, the Company is subject to risk from adverse fluctuations in foreign exchange rates. The Company limits these risks by using foreign exchange forward contracts. The changes in the fair value of the forward contracts are recorded in other (income) expense, net in the condensed consolidated statements of operations. |
Reconciliation of Net (Loss) Income to Adjusted Net Income | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
January 31, | January 31, | |||||||||||||||
(in thousands, except share data) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
Net (loss) income (GAAP) | $ | (28,715 | ) | $ | 16,571 | $ | (8,023 | ) | $ | 73,890 | ||||||
Add back: | ||||||||||||||||
Merger related expenses | 4,156 | — | 13,441 | — | ||||||||||||
Restructuring charges, net | 3,168 | 520 | 5,448 | 1,653 | ||||||||||||
Goodwill impairment | 30,129 | — | 30,129 | — | ||||||||||||
Net loss on debt modification | — | — | — | 364 | ||||||||||||
Change in fair value of foreign exchange forward contracts | (1,010 | ) | (1,418 | ) | (5,624 | ) | 8,266 | |||||||||
Tax benefit of add backs | (1,183 | ) | 221 | (3,011 | ) | (2,653 | ) | |||||||||
Adjusted net income (Non-GAAP) | $ | 6,545 | $ | 15,894 | $ | 32,360 | $ | 81,520 | ||||||||
Weighted average diluted shares (GAAP) | 14,569,239 | 15,159,442 | 14,548,800 | 15,430,164 | ||||||||||||
Add back: potentially anti-dilutive shares (1) | 66,031 | — | 67,628 | — | ||||||||||||
Weighted average diluted shares (Non-GAAP) | 14,635,270 | 15,159,442 | 14,616,428 | 15,430,164 | ||||||||||||
EPS per diluted share (GAAP) | $ | (1.97 | ) | $ | 1.09 | $ | (0.55 | ) | $ | 4.79 | ||||||
Adjusted EPS per diluted share (Non-GAAP) | $ | 0.45 | $ | 1.05 | $ | 2.21 | $ | 5.28 | ||||||||
(1) Potentially dilutive securities for the three- and nine-month periods ended January 31, 2026, respectively, have not been considered in the GAAP calculation of net loss per share as the effect would be anti-dilutive. |
Free Cash Flow | ||||||
Nine Months Ended | ||||||
January 31, | ||||||
2026 | 2025 | |||||
Net cash provided by operating activities | $ | 31,123 | $ | 63,687 | ||
Less: Capital expenditures (1) | 28,993 | 32,197 | ||||
Free cash flow | $ | 2,130 | $ | 31,490 | ||
(1) Capital expenditures consist of cash payments to acquire property, plant and equipment and cash investments in promotional displays. |
Net Leverage | ||||
Twelve Months Ended | ||||
January 31, | ||||
(in thousands) | 2026 | |||
Net income (GAAP) | $ | 17,542 | ||
Add back: | ||||
Income tax expense | 6,392 | |||
Interest expense, net | 15,130 | |||
Depreciation and amortization expense | 62,561 | |||
EBITDA (Non-GAAP) | $ | 101,625 | ||
Add back: | ||||
Merger related expenses | 13,441 | |||
Restructuring charges, net | 8,403 | |||
Goodwill impairment | 30,129 | |||
Net gain on debt modification | (374 | ) | ||
Change in fair value of foreign exchange forward contracts | (10,354 | ) | ||
Stock-based compensation expense | 6,644 | |||
Net loss on disposal of property, plant and equipment | 1,049 | |||
Adjusted EBITDA (Non-GAAP) | $ | 150,563 | ||
As of | ||||
January 31, | ||||
2026 | ||||
Current maturities of long-term debt | $ | 8,635 | ||
Long-term debt, less current maturities | 360,512 | |||
Total debt | 369,147 | |||
Less: Cash and cash equivalents | (28,261 | ) | ||
Net debt | $ | 340,886 | ||
Net leverage (1) | 2.26 | |||
(1) Net debt divided by Adjusted EBITDA for the twelve months ended January 31, 2026. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20260226952554/en/
Bradley Kosler
VP Finance
540-665-9100
FAQ**
How has the recent merger with MasterBrand, Inc. impacted American Woodmark Corporation AMWD's financial performance and what are the expected synergies from the merger?
What specific strategies is American Woodmark Corporation AMWD implementing to mitigate the impact of tariffs and reduce overall costs amidst declining demand in the market?
With a net loss of $(28.7) million for Q3 FY 2026, what steps is American Woodmark Corporation AMWD taking to improve profitability and restore investor confidence in the upcoming quarters?
How does American Woodmark Corporation AMWD plan to address the non-cash goodwill impairment charge of $30.1 million and its effects on future financial reports?
**MWN-AI FAQ is based on asking OpenAI questions about American Woodmark Corporation (NASDAQ: AMWD).
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